The Energy Regulatory Commission (ERC) is eyeing to issue a revised draft on planned updates to existing competitive selection process (CSP) rules within the week.
The regulatory body said among the key provisions being reviewed due to issues raised by stakeholders are the consistency of the revised CSP guidelines with the Department of Energy’s policies, fixed-price contracts as well as the term and duration of contracts.
Under the CSP, a distribution utility may only sign a power supply agreement (PSA) with a generation company after calling for and receiving at least two qualified bids from generation companies.
It will be allowed to have direct negotiations with other power suppliers only after at least two failed bidding procedures.
The revised draft of the updated CSP will go through consultations so it can be finalized before the end of the month, Monalisa Dimalanta, ERC chairperson, said on the sidelines of the Giga Summit held in Makati City yesterday.
Manila Electric Co. (Meralco) in a letter to the ERC said “mandating a fixed energy price will result in higher cost to consumers since it will drive power suppliers to factor in their offered rates the risk of non-recovery of costs, or not participate in the bidding because of such risk.”
Meralco also said a maximum PSA should be allowed for at least 20 years, to ensure the lowest possible cost to customers and additional power supply in the grid.
The company also argued based on its experience, there are no greenfield projects with a contract term of only 10 years, unless a developer and a lender can arrange a recovery setup for such period. – Jed Macapagal
